I'm an 31yo above minimum wage worker with a little over $5k in debt from credit cards with various interests, with a credit score of 617, stocks ETFs and REITs with dividends, stable cryptocurrency and a sizable 401k. Originally I was 10k in debt last year but I got it down to 5k.

My goal is to buy a new car and a house with a VA loan ASAP like within the same year frame.

I've been preapproved for $230k. And I'm well available to take on all three but what would be the best path time wise and financially?

I'll be paying the debt regardless. But I'm trying to boost my credit score higher.

Do I get the car first and wait up to 6 months to see my credit score bolster up? Do I wait and get the House and wait even longer with the tax break?

Do I get a debt consolidation loan with lower interest and payments? This will no doubt be a challenge for me but nonetheless I will take it on.

  • What's the $5K in debt from? Are you paying that off or is it growing?
    – D Stanley
    Nov 5 at 13:15
  • 1
    what is the interest rate on the 5K in debt? Do you have enough money for the down payment, and closing cost for the house? Nov 5 at 13:53
  • I'm voting to put this on hold until the OP has edited in more details, like the interest rate on the loan and its form. Nov 5 at 14:11
  • The debt is from credit cards. The interest is varied. It's going down gradually. November of 2020 I was 10k in debt, through side jobs and a pay raise with overtime I've whittled it down. I couldn't keep the side jobs for my healths sake. Nov 6 at 6:47
  • I've been using my stocks and crypto(mostly stablecoin with a high apy) as a savings account and I plan to use them as a down payment and if need be I would liquidate my 401k(I understandthe tax penalties for early use). My job matches my 401k and I've never increased the percentage in the four years I've paid in to it so I can make that back. Nov 6 at 6:59

You're on the right track with paying off debt - don't ruin it by getting a car loan, or any other kind of loan except a home loan.

Pay off all your debt first, then put the rest of your savings toward a down payment on a home.

If you NEED a car, buy a cheap one with cash. Otherwise, don't buy one if you can avoid it - it's just a distraction from your higher-priority goals.

A debt consolidation loan isn't a bad idea, but it's probably also a distraction given you only owe $5k. It might save you a tiny bit on interest, but at the end of the day making huge principal payments is what you need to be doing.

  • I am on the right track. I know that but I'm choosing to eventually buy a brand new car ($28k) through my work they offer a better deal under msrp with an lifetime warranty on engine, drive train and transmission. I drive a classic car that is my everyday driver and I'm capable of keeping it running reliably but there will come a time where I will need to suspend its use for a while. I could by a cheap car if I wanted but I'd rather not adopt any unwanted problems. Nov 6 at 7:51
  • I've seen first hand the problems of cheap and used cars have or else I'd have another by now. But I've done the research on this particular car and it's the best and cheapest in its field for me. Nov 6 at 7:52
  • As for my va home loan. I've been approved for $230k max with 2.5% in closing costs. I should have mentioned this earlier. I have been making bigger than minimal payments. But it's not enough to build my credit. If my credit goes up my loan max goes up. My loan max goes up the bigger, better a house I can get. I had already planned to sublet rooms to family/trusted people if I get a house that way I wouldn't have to pay much on a mortgage or I'd be able to pay it off faster. Nov 6 at 8:05
  • No matter what I always pay my bills, always. I've tightened my belt. I can further cut my spending. If need be I'll live in my car(I could also live in brand new car while keeping old one right next to me) but I need help making the best possible choice to up my credit score and make a smooth transition. Nov 6 at 8:17

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